Rising fuel prices: ahead of the Council of Ministers meeting, excise duty cuts to apply only to diesel

A targeted measure on diesel to bring prices – now close to 2.2 euros per litre across Italia – back below the psychological threshold of two euros per litre. This is what the Government is considering ahead of this afternoon’s Council of Ministers meeting – scheduled for 5.30 pm – at which it will introduce a stopgap decree pending the implementation of July’s variable excise duties, which will only be accounted for after the first few days of August.

The decision to focus resources on diesel, whilst leaving petrol out of the equation, reflects the different rates at which the two fuels have moved in recent weeks: this morning, diesel is trading at 2.185 euros per litre, at the same levels as in March 2022, in the wake of Russia’s invasion of Ukraine. Petrol, meanwhile, remains at €1.982, below the critical threshold (even though this is the highest average price of the year) and is therefore likely to be excluded from the measure.

However, there remains a degree of caution regarding the exact figures for the operation: technical calculations are still under way in the run-up to the Council of Ministers meeting and may be subject to adjustments later today, depending in part on the resources actually available.

Today’s decree is merely the first stage of a two-part manoeuvre. The next Cabinet meeting (4 August) is expected to consider, in the light of the figures on the VAT windfall revenue for July, whether to activate the variable excise duty mechanism.

In the background are the figures already crunched over recent months: between March and the first few days of July, the government spent around two billion euros to keep petrol prices in check, with the stated aim of sending a signal ahead of the ‘red alert’ week at the start of August.